Technical Picks: Nifty, Bank Nifty
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Nifty: The event packed week started with a massive gap up opening on the back of landslide victory of BJP in UP assembly election. The enthused bulls carried the momentum further throughout the remaining part of the session. In the process, Nifty concluded the week with a decent gain of 2.52 percent.
- Although it was a crucial event however we have anticipated this move as we have highlighted in our previous weekly report regarding the weekly 45-EMA which entered above 60 mark leads to acceleration.
- Also, the impact of breakout from bullish Cup & Handle pattern was seen during last week.
- On a weekly chart, Nifty has broken the bearish divergence trend line drawn on RSI (14) chart which is a bullish indication.
- Going forward, we expect this momentum to continue towards 9260 / 9325 and advised traders not to pre-empt any corrective move. On the flip side, the higher band of gap area placed at 9060 / 9000 level likely to provide immediate support in case of any correction.
Bank Nifty: After three weeks of consolidation, the bulls came into action by opening with a decent gap and precisely tested the resistance zone of 21200 / 21400. In the process, Bank Nifty concluded the week with a decent gain of 2.16%
- Looking at the weekly chart, Bank Nifty precisely retraced 127% reciprocal of its previous swing move from the top of 20576 to 17607. Also, last week candle resembles a Doji pattern indicates indecision.
- On a daily as well as on a weekly chart, we are seeing Bearish Divergence however as the weekly 45-EMA of RSI (14) is trading above 60 mark, we will not advised traders to build any short position.
- Going forward, the last week’s upper band of gap area placed at 21060 will act as an immediate support below which the strong support placed near 20875 which coincides with the previous daily swing high hence traders are advised initiate long position near this level. Higher side, 21336 / 21450 zone likely to act as an immediate resistance.
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